Energy cost burdens and household coping strategies in Fergana Valley

Abstract

Energy burden is the situation where the household are not anymore able to afford the high energy costs and use the essential standard of energy to meet essential needs since, everything depends on electricity starting from electronics to household appliances it is almost impossible to imagine a normal life without the usage of electricity especially the needs for food and hygiene. While various studies demonstrate the issue of energy affordability caused mainly by income, this study argues that technological as well as structural indicators are equally important in shaping households energy vulnerability. Focusing on the three areas of Central Asian countries as Kyrgyz Republic, Tajikistan and Uzbekistan considering the secondary data of CAREC household survey 2023 on energy access in the Fergana Valley was constructed an energy burden index that not only captures the financial stress but also includes heating related expenditure. Ordinary Least Squares regressions with country fixed effects are utilized to find out the main factors affecting energy cost burden as socioeconomics, housing-related along with demographics while to identify the coping strategies of households descriptive and comparative analysis were used. The results demonstrate that energy burden within the Fergana Valley scope is not determined by income alone, the most robust predictors energy system characteristics along with the housing efficiency indicators. Mudbrick based housing, challenges with heating the dwelling during the winter as well as cooling during hot seasons and experiencing frequent blackouts can lead the households to higher energy burden. Across the three areas of Fergana Valley Uzbekistan encounters the highest burden of energy. When the burden intensifies households start to utilize coping strategies to soften the issue and to fulfill their needs. The most frequently observed strategies are switching to alternatives, borrowing money from friends/ relatives, taking loans, limiting the usage in the peak time and reducing the expenses on other daily needs, increasing households' concerns about long-term welfare. This research paper provides household level evidence that serves as the contribution to the limited empirical literature on the energy cost burden with the emphasis on central Asian countries reframing the issue as structural as well as infrastructural based rather than purely income based problem. This research raises the need for policy interventions on efficient energy upgrades, improvements in housing quality including infrastructure availability that can enhance the energy burden of households in an equitable manner.